Grounded in Popularity and Taste

A stalwart product, even in a high-price market, ground beef’s versatility and diversity keep it an American staple.

Move over, apple pie — ground beef may be even more American.

From a consumption standpoint at least, ground beef has proved to be a perennial staple in the American diet. Ground beef remains the No. 1-selling category in the meat department, according to a report cited by the Centennial, Colo.-based National Cattlemen’s Beef Association (NCBA). Hoffman Estates, Ill-based FreshLook Marketing Data reported that 4 billion pounds of ground beef were sold at retail from November 2012 to November 2013.

Beyond the sales figures, consumers have expressed a fondness for, and loyalty to, ground beef as a common part of their diets. In the most recent Consumer Beef Index, 93 percent of consumers reported eating ground beef at least once a month, with more than two-thirds (67 percent) saying they eat ground beef once a week.

As retailers start planning and executing their summer grilling programs, it’s also worth noting that burgers top the list of the most popular foods prepared using a grill, according to the Hearth, Patio and Barbecue Association, based in Arlington, Va. Meantime, in one of its 2013 studies, the Chicago-based market research firm Mintel found that 91 percent of Americans cited burgers as their favorite choice for grilling.

“We truly have a tremendous demand for ground beef today, and as the summer draws closer and the weather warms up, we will see demand increase,” concurs Mike Miller, SVP, global marketing and research for NCBA.

Just as ground beef comprises a healthy part of consumers’ diets, it’s also integral to the overall beef category. Ground beef accounts for nearly 60 percent of per capita beef consumption, according to recent figures from Englewood, Colo.-based CattleFax.

Breaking New Ground

While ground beef is a mainstay on consumers’ plates (and palates), patterns of consumption of ground beef have evolved over the years, stemming from shifting attitudes toward nutrition and health, concerns about value, and other issues ranging from food safety to seasonal demand.

One current situation driving trends in ground beef is the market itself. Coming off a year of high prices and tight supplies in 2013, this calendar year looks to be somewhat of a mixed bag, with continued constricted supply balanced by a slow rebuilding of cattle herds moving forward.

As of early 2014, the cattle supply was at lows not seen since the early 1950s. A sluggishly rebounding economy, higher exports and years of drought didn’t help matters — nor, it seems, did the subzero temperatures at the beginning of this January across much of the country, and a late fall blizzard that affected cattle herds in South Dakota.

The dynamics spurring higher prices aren’t limited to the United States. “Global supply in general is butting up against strong demand,” observes Miller. “The supply-demand situation and the ensuing price situation are really in play around the globe.”

Laurie Bryant, executive director and secretary of the Arlington-based Meat Importers Council of America (MICA), agrees. “It will be a couple of years before we see a real increase in beef supplies, if there is a rebuilding,” he says.

An importer representative on the Cattlemen’s Beef board, Bryant has insight into the effects of import trends on the retail meat case, including ground beef. As imports of manufacturing beef come in from Australia, New Zealand and, to some degree, Canada, imports from some areas in South America are increasing. (While regions of Brazil can’t export meat at this time, proposed regulations may open the door, likely after 2014, Bryant says.)

Increased beef consumption in China is also siphoning off beef that might be in the U.S. marketplace. “We’ve continued to watch … the growth in demand for beef in China, which impacts our ability to bring beef in,” Miller says, “and I think that will be increasingly the case, and something that we have to talk about and plan for.”

Len Steiner, principal at the consulting firm Len Steiner Group, in Manchester, N.H., agrees. “China in particular has become a competitor for beef products. They went from essentially nothing a few years ago to 16 percent of Australian exports,” he points out.

Domestically, meanwhile, the retail and foodservice markets are each trying to meet their respective healthy demands for ground beef. With major foodservice brands like McDonald’s, Burger King and others using significant ground beef tonnage to make hamburgers, retailers may feel the pinch and look for ways to shore up their ground beef inventories.

For now, the concurrent marketplace factors mean higher prices for all beef, including ground beef. According to data from the Washington, D.C.-based Bureau of Labor Statistics, retail ground beef averaged $3.477 a pound in November, down slightly from a high of $3.50 in September. For its part, FreshLook Marketing pegged the average retail price for all ground beef at $3.48 a pound at the end of 2013.

Lean Times

Even as comparatively lower prices for poultry and, to some extent, pork, are ratcheting up competition at the meat case, Miller says that another attribute of ground beef makes it appealing in today’s merchandising climate. “The great thing about ground beef for our industry is that the supply is a little more flexible than for whole-muscle cuts. If we get a price signal, which we’ve had several times over the past few years — even in the heat of grilling season, when demand heats up — we can grind some lower-value whole-muscle product to increase that supply,” he points out.

In addition, lean finely textured beef (LFTB) delivers on taste and value in a meat case squeezed by price and availability. Generally 93 percent to 97 percent lean, LFTB is 100 percent beef, made with lean beef trimmed from whole-muscle cuts of beef, including sirloins and ribeyes. No organs, tendons, bones or fillers are used.

“It’s certainly a real option for inclusion in ground beef,” says MICA’s Bryant. “The opportunity is there for the product to help shore up the supply. And it’s a good product, in my opinion.”

Miller believes that LFTB has a place, especially at a time of strong demand and thinner supplies. “The ways that the suppliers of that product are approaching this are very appropriate. They are slowly and deliberately and with transparency bringing lean finely textured beef back into the marketplace. With the current price signals, we’ll continue to explore how to add to the supply and add value back to the industry,” he remarks, adding, “From our perspective, the product has been proven safe and effective.”

According to Miller, education is key as lean finely texture beef is reintroduced, including information shared with those in the supermarket business. “That is a partnership that has to be there from the start, and the suppliers are taking that approach,” he observes.

To that end, as beef companies like Beef Products Inc., in Dakota Dunes, S.D., and Minneapolis-based Cargill reintroduce lean finely textured beef, they’re providing a plethora of information and research findings to consumers as well as retailers and foodservice operators.

The great thing about ground beef for our industry is that the supply is a little more flexible than for whole-muscle cuts.”
—Mike Miller, National Cattlemen’s Beef Association